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Cultural Capital and Entrepreneurship in Nepal: the Readymade Garment Industry As a Case Study

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Cultural Capital and Entrepreneurship in Nepal: The Readymade Garment Industry as a Case Study Mallika Shakya Development Studies Institute (DESTIN) February 2008 Thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy by the University of London UMI Number: U613401 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U613401 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 O^lJbraryofPeMic. find Economic Science Abstract This thesis is an ethnographic account of the modem readymade garment industry in Nepal which is at the forefront of Nepal’s modernisation and entry into the global trade system. This industry was established in Nepal in 1974 when the United States imposed country-specific quotas on more advanced countries and flourished with Nepal’s embrace of economic liberalisation in the 1990s. Post 2000 however, it faced two severe crises: the looming 2004 expiration of the US quota regime which would end the preferential treatment of Nepalese garments in international trade; and the local Maoist insurgency imposed serious labour and supply chain hurdles to its operations. Such a common scenario saw different responses from the differing caste and ethnic groups operating within the garment industry. Bahun-Chhetris, the new business elites who had recently joined the industry aided by newly acquired finance, knowledge and skills, could only produce homogenous garments which would not survive the local and global crises. Marwaris and Buddhist Newars, the old business elites with differing political and cultural legacies, went on to produce specialised garments and successfully capture secure and profitable market niches. They achieved this either by using the material knowledge and networks accumulated over generations, or by invoking their cultural identities to legitimise their authority over the semiotics used to distinguish their products. I examine Douglass North’s theory on institutions and Pierre Bourdieu’s theory on cultural capital to examine the relationship between formal and informal economic processes, and understand the way they transform throughout economic development. The habitus of transactional knowledge, structure and rules that prevailed in the conventional economy widened once it was exposed beyond its original boundaries. The new habitus has in turn drawn from the culture, history and politics of the old habitus as it set out to embrace new opportunities and threats. Such a transformation of the habitus has important distributional effects on the existing social structure and power balance between various communities within an economy. 2 Table of Contents Abstract.............................................................................................................................. 2 Chapter 1: Introduction...................................................................................................5 1. Local institutions affecting the industry................................................................6 2. Global institutions affecting the industry..............................................................8 3. Caste and ethnicity in garment economics..........................................................11 4. The thesis and the research methodology........................................................... 12 Chapter 2: Reconstructing the history of factories, politics and culture.................... 20 1. The State evolves, 1560-1951 (and a stage set for old entrepreneurs).............. 20 2. The State modernises, 1951-1990 (and a stage set for the garment industry) .24 3. The State liberalises (and the garment industry takes the centre stage) ............ 30 3a. Liberalisation brings sophistication to the process of garment-making .32 3b. Liberalisation also leads to a global niche market of ethnic- contemporary designs.............................................................................................35 4. A counter-order emerges as the Maoists play the ethnicity card.......................41 4a. Caste and ethnic composition in the garment industry.............................43 5. A summary............................................................................................................45 Chapter 3: A theoretical framework............................................................................49 1. Is the ‘new’ institutional theory a premature departure from the ‘old’ institutional theory?...................................................................................... 50 2. Trust......................................................................................................................54 3. Industrial organisation within the study of institutions...................................... 59 4. Bourdieu and cultural capital.............................................................................. 62 5. Can we compare Bourdieu with North?..............................................................67 Chapter 4: Arya-Nepal..................................................................................................73 1. History of the factory...........................................................................................73 2. Workers.................................................................................................................81 3. Production.............................................................................................................83 4. Transportation and Shipping................................................................................89 5. Collapse of the factory.........................................................................................92 Chapter 5: Rongoli........................................................................................................ 98 1. The caste and family background of the owners.................................................98 2. Tracing the factory history.................................................................................102 3. Rongoli garments............................................................................................... 108 3a. Designing: ‘a musical concert’ ........................................................ „...l 11 3b. Production: a ‘wife’s department’.......................................................... 115 3c. Buying fabrics........................................................................................... 119 4. Resilience beyond the MFA...............................................................................125 3 Chapter 6: Swakan-Chhemu ........................................................................................ 127 1. Situating the Shakya family: Buddhist artisanship and tradesmanship..........127 2. Property ownership in a joint family: the old, the young and the female 131 3. Designing for Swakan-Chhemu: more than just garments..............................135 4. Turning samples into production: a spatial expression of the order.............. 138 4a. The top floor: owners, their kin and the trusted......................................138 4b. The first floor: the world of fabrics........................................................ 142 4c. The ground floor: the labour....................................................................145 5. Resilience beyond the MFA...............................................................................147 Chapter 7: Cultural capital........................................................................................... 149 1. Cultural capital in manufacturing specialised garments.................................. 150 2. The context of cultural capital............................................................................155 2a. IndraChok.................................................................................................155 2b. Boudha....................................................................................................... 157 3. Widening of the field......................................................................................... 158 4. Reconsolidating social classes within a widened field.................................... 160 5. Conclusion..........................................................................................................164 Chapter 8: Industrial organisation...............................................................................166 Organisation within the factory................................................................................167 la. Owners ....................................................................................................... 167 lb. Workers...................................................................................................... 170 2. Organisation of non-factory components..........................................................175 2a. Buyers.......................................................................................................
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